Power: Reformer R.I.P.

Paul Vallas was the most effective Philadelphia schools chief in a generation. So why did he leave for New Orleans? The story of his downfall says something about Vallas—and even more about the nature of Philly power

The revelation was stunning, gut-cinching. How the hell did this happen? And how the hell was he going to fix it?

On a Friday last October, Paul Vallas took his wife and two close aides to the Rose Tattoo Cafe on Callowhill for an impromptu lunch. The aides, Hugh Allen and Leigh Whitaker, didn’t know until they arrived at the restaurant that the occasion was a celebration of their boss’s 22nd wedding anniversary. But that’s how it was with the manic, voluble Vallas — the line between life and work, between personal and public, had long ago been smudged out of existence. Camped around a corner table, under the ubiquitous hanging flowers and plants, the foursome talked about the offer Vallas had been mulling — to run Los Angeles’s schools. Whitaker assured Vallas, who had earned a national reputation by turning around problem school districts in Chicago and Philadelphia, that he had made the right decision by passing on the job.

Vallas ordered jambalaya, and as usual, he ate fast, as if someone might snatch the plate away before he was done. Then he picked at other people’s plates. “Are you going to finish that?” he asked.

After about an hour, while the four sipped coffee, Whitaker’s cell rang. It was Claudia Averette, Vallas’s chief of staff.

“I need to talk to Paul,” she said. Averette’s voice was oddly formal, serious. Whitaker passed her boss the phone, and Averette told Vallas what she had just learned from the finance team: The deficit in the district’s budget was worse than anybody thought. A lot worse.

After she was finished, all Averette heard was silence. “Are you there Paul? Paul?”

Paul was there. “You’ve got to be kidding me,” he finally said. “This is bullshit. … This is bullshit.”

Then, as Hugh Allen later recalled, “He blew a gasket.” Vallas’s voice climbed the rungs of disbelief, and his speech quickened. He stood up.

“What do you mean!?” he bellowed. “What do you mean?!”

The restaurant wasn’t crowded, but a few heads turned to watch the six-foot-five-and-a-half-inch, gawky, bespectacled man’s curse-filled rant.

Vallas rushed back to headquarters and quickly convened a meeting of top district officials. Huddled in a conference room, they listened and watched as their boss — a man capable of both immense warmth and fierce, bludgeoning anger — traversed a wide spectrum of emotion. “This is shit people resign over,” Vallas told his staff.

They all sat there, baking in the tension, bracing for his verbal blows. He grilled the finance people, clubbing them with questions faster than they could lob up answers. They didn’t know why the deficit was so high; they would have to do more research to find out.

Vallas slumped low in a chair, his head level with the table’s surface.

After a while, he grew quiet, cocooned in despair. Then he did something uncharacteristic for a man who prides himself on being able to solve almost any ­problem — and who is particularly renowned for being a budget whiz. He placed the sheet of paper he’d been reading — the one with the glaring new figures — on the table.

“I don’t know what to do,” he said, his voice softening. “I don’t know how to fix this.”

FIXING THINGS, of course, is how Paul Vallas made a name for himself, and what first brought him to Philadelphia in July of 2002. Fresh off a successful six-year stint as head of Chicago’s public schools, Vallas was hired to perform a similar sort of turnaround here.

Five years later, the gains he made are impressive, particularly in a district afflicted by poverty and chronic underfunding. While enormous problems still exist — a staggering dropout rate, school violence, a yawning budget deficit — the Philly school district is an indisputably better place thanks to Vallas’s bold, innovative changes. Test scores have risen significantly; 33 new, smaller high schools, including district-supported charters, have opened; a standardized curriculum has been implemented; more certified teachers have been retained; early-childhood education programs have almost doubled; more students are enrolled in Advanced Placement courses, and more take the SAT. Above all, the district has received a potent dose of a starkly lacking commodity: hope.

So why is the man who engineered all this beginning the new school year, not in Philadelphia, but attempting to revive New Orleans’s schools? The answer in part is Vallas himself, who is essentially hard-wired for constant momentum. He is the guy you turn to when the situation is ceaselessly bleak, when things need to be shaken up, torn down, reconstituted. He moves fast, pursuing his agenda with military urgency, chafing those accustomed to the status quo, aggressively spinning his story as he goes. He gobbles up resources, says no too little and yes too much. It’s the kind of pace that will only be tolerated for so long, and it’s one reason the district now faces a deficit of $120 million, even after recent infusions of city and state aid — as well as cuts that could corrode some of the progress that’s been made.

But the deciding factor in Vallas’s departure is that when things got dicey, his support among the five members of the School Reform Commission dwindled. Vallas now says bluntly, “I was relieved of command.”

It happened, he says, one afternoon last spring, several months after the budget blowup, when SRC chair James ­Nevels summoned him to a private meeting in his office. The reserved chairman told the man with whom he and the SRC had forged a course of remarkable change that the majority of the board no longer supported him. He told Vallas that he should get ready to leave in June.Nevels flatly refutes this — “Why would we want to freeze out someone who’s been bringing home the achievement we wanted so badly?” he asks — but there’s little question that the deterioration of the relationship between Vallas and the SRC was what really drove the most effective schools CEO in a generation out of town. Paul Vallas did a lot to try to save Philly schools, and in the end — whether he was visionary or reckless or both — his ambition exceeded his means. But what he ultimately couldn’t survive was a board out to protect its own hide.

IN CHICAGO, everything goes through Mayor Richard Daley, and for much of the time that Paul Vallas ran the Windy City’s schools, from 1995 to 2001, he had Daley’s imprimatur. When Vallas arrived in Philadelphia in July 2002, though, he was no longer one of the king’s men. Our comparably diffuse distribution of power required quick adaptation.

“Chicago’s a monarchy,” says Michael Karloutsos, who ran Vallas’s 2002 campaign in the Illinois Democratic gubernatorial primary (he lost, but barely) and later followed his mentor to Philadelphia. “Philadelphia is like modern-day Afghanistan. But instead of warlords, we have ward leaders.”

The man who would provide Vallas his warrant in the City of Brotherly Love wasn’t Mayor John Street, who had lost control of the ailing schools when the state took them over in 2001, but Nevels, a Republican and the founder of the Swarthmore Group, a Center City investment advisory firm. Nevels was appointed by then-governor Mark Schweiker to oversee what many considered to be the most ambitious school revamping of its kind. The African-American businessman’s measured, often inscrutable mien contrasted with the uncensored, quirky candor of his new CEO. Nevels was always crisply attired and spoke in careful, crafted sentences. Vallas was restless and disheveled, and his staccato speech is littered with fragments and tangents.

But the two men share humble backgrounds — Nevels was born to teenage parents in Alabama and was the first member of his family to attend college; Vallas was a “special-ed kid” who stuttered and struggled in school — and they formed a strong partnership. If Vallas was Batman, Nevels was Commissioner Gordon. They each needed what the other provided; Nevels brought equilibrium, legitimacy and a mandate; Vallas brought unalloyed enthusiasm and brute force.

That get-things-done mentality was evident from Vallas’s very first SRC meeting in 2002. According to a report by Research Action, an education nonprofit, the father of a boy with a severe disability approached the microphone and said he couldn’t get a response from the district’s special education office on a program placement for his son. After he completed his remarks, he began to walk away — perhaps because unilateral silence usually greeted comments from the public at SRC meetings. Vallas, though, told the man to stop, and asked if anyone from the special education office was in attendance. No one was, but Vallas informed the man that he would talk to him after the meeting and that he thought the problem could be resolved that day.

From that point forward, when someone raised a problem at a commission meeting, Vallas would try to pair the individual with administration officials who could be helpful. He quickly earned a reputation as an accessible leader who would make things happen.

Parents were soon approaching him at Starbucks, the doctor’s office, the dentist — wherever he went — with problems: Their kid wasn’t getting picked up by the bus, was getting bullied, had witnessed a murder and needed to be transferred to a different school for protection. Always armed with a spiral notebook, he would take down complaints and contact information and then tear out the pages, passing them out to members of his staff and saying, “Take care of this for me.” (Sometimes the big-talking CEO would pledge something impossible, and his staff was left scrambling.) While visiting a preschool, Vallas knelt down to tie a toddler’s shoe; pretty soon, kids all over the district began untying their shoes and bringing them to him to knot back up — and he obliged.

In his first several years on the job, he created a crisis fund to post rewards for the killers of schoolchildren and to help victims’ families pay for funerals. And he attended those funerals, dozens of them.

The frenzied workaholic achieved the perception of superhuman ubiquity. Paul Vallas was everywhere: schools, community meetings, churches, sporting events, the state legislature, City Hall. Jim Nevels was many of those places, too, but he often worked behind the scenes, the quiet curator of district support and stability. Along with four fellow SRC commissioners — two appointed by Schweiker and two by Mayor Street — Nevels crafted alliances with nonprofits and businesses. And the deliberative businessman was usually able to prevail upon his commissioners to produce unanimous votes.

Vallas and Nevels became the locus of Philadelphia school reform, their names as closely linked as Chase Utley’s and Ryan Howard’s. They attended events together and spoke regularly on the phone, often in the wee hours, whether to discuss a matter of governance or commiserate when a child was killed or reported missing.

When he arrived here, Vallas says, he found a school system, and a city, plagued by a “curse of low expectations.” Thanks to surging test scores and smaller high schools, among other things, he says now, “We’ve gotten a taste of what’s possible.”

NOT EVERYONE in Philadelphia was a fan. Vallas clashed publicly and privately with John Street, who he says did next to nothing to support his ambitious multibillion-dollar plan to redo the district’s infrastructure and repeatedly refused to reimburse the district for use of its buildings and other expenses. Vallas also got into a feud with City Controller Alan Butkovitz when, in early 2006, the school district announced it was stopping the decades-long practice of allowing employees of the City Controller’s office to be on its payroll. The decision infuriated the newly elected Butkovitz, who alleged that Vallas was out to get one of the employees; it seemed like no accident that Butkovitz soon began aggressively investigating the school district.

Butkovitz says now that he saw a disturbing pattern: a vindictive schools CEO who vigorously resisted oversight and refused to provide auditors with basic information. (Vallas calls these charges “hogwash.”) While Butkovitz made some legitimate inquiries — including requesting information on no-bid contracts — it’s hard not to catch a whiff of grandstanding in the hyperbolic tenor of his criticism. Indeed, in expounding on his important role in auditing the school district, he has this to say: “Every dictator in history, or a lot of them, come in on a wave of popular support saying they’re going to do some good things. But they have to be hemmed in with checks and balances or it turns very bad.”

His general point is correct, but the statement is delusional: While Vallas can be a bully and a control freak, he’s no Mussolini.

But the schools dynamo does bristle at some criticism and obsesses on PR. Ask consultant Ellen Green-Ceisler, who was hired by Vallas to conduct a review of the district’s disciplinary system. Her balanced report uncovered several shortcomings, but also gave the district credit for trying to solve its problems. Still, she says Vallas sat on it for a year. “What I learned about Paul Vallas was that he was concerned about his image,” Green-Ceisler says. Vallas replies that he found her report anecdotal and filled with generalizations.

By 2006 it was clear that Vallas had lost the support of at least a portion of the SRC. That May, Nevels invited Vallas and the four other SRC commissioners to dinner at Four Seasons. During the sumptuous meal — two commissioners had the lamb — the chairman told his CEO he thought he was doing a great job and that they should start talking about extending his contract, which ran out in July 2007 — a position shared by board members Sandra Dungee Glenn and Martin Bednarek.

But not everyone at the table felt that way. Vallas and Bednarek recall that Commissioner James Gallagher and then-Commissioner Daniel Whelan, both appointed by former Governor Schweiker, argued that it was time for a new leader. The two men had long been at odds with Vallas, whose frenetic, independent style reportedly galled them. Vallas remembers Whelan asserting that the district “needs a bureaucrat and not a messiah.” Gallagher suggested that a severance package be brokered, according to Bednarek.

Vallas told the commissioners that Los Angeles’s school district had approached him about heading up its system. He added that he would be willing to remain in Philadelphia, but asked for a decision soon so he could make plans for his family.

It wasn’t until August 23rd, after a motley chorus of politicians, advocates and other stakeholders had urged the board to keep Vallas, that it finally voted 3-2 to extend his contract until 2009. Gallagher and Whelan were the dissenters.

According to Vallas, the time between the Four Seasons dinner and that vote was filled with strange behind-the-scenes wrangling. About a week after the dinner, Gallagher, outgoing president of Philadelphia University, and Whelan, the former president of Verizon Pennsylvania, Inc. (whose SRC term ended in January 2007), took Vallas to breakfast at a Center City diner. They reiterated that it was time for him to move on. He responded that the commission needed to come to a decision, and that he would abide by it. (Dungee Glenn, Gallagher and Whelan did not return calls seeking comment for this article.)

Later in May, Gallagher and Whelan urged the commission to launch a national search for a CEO to replace Vallas at the end of his contract. Nevels nixed the idea. Then Vallas’s attorney, who had been negotiating with commission lawyers, informed his client of a proposed exit package, Vallas says. The deal would have let him take the L.A. job while simultaneously serving out his Philadelphia contract by acting as a consultant. This would mean that he could “complete” his five-year tenure and become vested in his pension.

Vallas is fuzzy about further details, including exactly who made the offer. Both Nevels and Bednarek say they were unaware of any discussion of an exit package and that the commission didn’t vote on the matter.

In July, Vallas says, the exit package was suddenly retracted and a two-year contract extension offered in its place. He accepted.

LAST FALL, everyone wanted to know how Vallas, the former Chicago city budget director, could have let the Philadelphia school district’s deficit get so out of control. Mayor Street and members of the SRC hammered him during hearings, expressing incredulity and dismay. “One of the things the SRC thought it was getting was a budget guy,” Nevels says now.

While Vallas acknowledges that he overspent and took his eye off the budget ball, he says the SRC shares culpability for the cash problems. The deficit — and some of the unforeseen expenses that magnified it — was a surprise, but the years of overspending were not. “There was a conscious decision to spend more than we had,” Vallas notes. “That was a collective decision.”

Vallas also says that Nevels recruited the district’s former chief operating officer, Folasade Olanipekun-Lewis, and that she privately briefed the commission, so its members should have known as much as he did about the district’s financial condition. Nevels denies both these points, but sources familiar with the district back up Vallas’s claims about Olanipekun-Lewis, saying it was Nevels who brought her on board. And the two had regular contact, according to the sources. (Two district staffers say Olanipekun-Lewis warned Vallas and the SRC the district was spending too much; Vallas says the warnings didn’t reflect how serious the situation was.)

The considerable extent of the fiscal woes was laid bare in June, when state budget secretary Michael Masch released a report on the causes of the deficit. Masch found that the district had exceeded its budget for each of the prior four years by “material amounts.” Worse, it had failed to use standard financial controls, such as annual five-year budgets and quarterly reports, that could have indicated problems. The deficiencies in the district’s budgetary control system predated Vallas and the School Reform Commission, but they weren’t corrected on their watch.

But Masch also determined that the overspending led to significant academic progress, and Nevels seems to concede that it was worth the price. “Reform races against the clock, as a hamster would on a treadmill,” he says. “We do not know how much time we have to do the work of the children, so we had to move decisively with deliberate speed in order to get that done. … Will things be forgotten? Will things fall under the table? Maybe they will, I don’t know, but I’m not equipped to say that we could move slowly or less quickly.”

This comment doesn’t seem to square neatly with Nevels’s remark that the “SRC thought it was getting was a budget guy.” If the budget had been a higher priority, wouldn’t reform necessarily have moved a little slower?

In November, the SRC created a fiscal accountability unit to monitor district spending, and in March it sharply scaled back Vallas’s authority to spend money. (The commission also rejected several of Vallas’s proposed budget cuts.) A commonly held belief among some district staff was that the SRC’s restrictions were designed to force Vallas out. Whether this was accurate, commissioners must have known that a man like Vallas, who needs acres of elbow room to maneuver, would not take well to such restraints, however justified they were.

As irksome as he found the board-imposed limitations, Vallas insists he was prepared to stay: “I wasn’t going to be the one to break my contract.”

But then came the afternoon last spring when, he says, Nevels summoned him to his office and told him he no longer had the support of the board. In April, Vallas announced his resignation. In May, the New Orleans job was finalized.

The bond between Vallas and Nevels had buckled before the deficit cropped up, according to Vallas. During the last year of Vallas’s term, he says, Nevels wouldn’t return his phone calls, and Vallas had to go through staff to speak to him. For his part, Nevels maintains that he and Vallas spoke regularly. Astonishingly enough, he says they still “have an ongoing friendship.”

Former governor Mark Schweiker, who helped create the School Reform Commission and appointed Nevels, Gallagher and Whelan, believes Vallas was scapegoated. “They threw Paul under the bus pretty quickly after the number popped out,” says Schweiker. Commissioner Bednarek acknowledges that the blame doesn’t all belong to Vallas: “I think the commission was ultimately responsible,” he says. “I don’t think anyone’s blameless.”

ON THE TUESDAY morning of his last week in Philadelphia, I sit with Paul Vallas at a small conference table in his office, on which a birthday card is propped next to a stained yellow legal pad and two DVDs: Limbo and The Weight of Water. (Vallas is a big movie buff.) During the interview, he scribbles furiously. But he isn’t taking notes; he’s doodling. It’s one of his many quirks. When he gets stressed out, which is a lot, he also sometimes chews on napkins and balled-up pieces of paper, or plucks out eyebrow hairs (“My eyebrows have been bald for six or seven years now,” he says).

At one point, his secretary informs him that he has a phone call from Cozette Buckney, a former aide who resigned last year after the Inquirer raised questions about more than $70,000 in taxpayer-funded expenses she incurred over four years while commuting from her home in Chicago to a part-time job in Philadelphia. Vallas had ordered her to repay $19,000 in “inappropriate” fees. “I had to drop her,” he tells me. “That was probably the most controversial personnel thing we had here.”

Buckney is now working for Vallas in New Orleans, and the two speak about the upcoming school schedule. “We’re trying to convert the district to a year-round district, because kids are so far behind,” Vallas tells me. He predicts he won’t stay in the Crescent City long. “Two years, tops,” he says. Enough time to make an impact but probably not too many enemies.

His five years in Philadelphia were long enough to do plenty of both, but far more of the former. After his phone call with Buckney, I ask him what grade he would give himself for his Philly performance.

“A for effort,” he says without hesitation. Then he pauses. “But I think my reforms here are incomplete, so I would give myself … an Incomplete.”

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